Attorneys General Announce $92 Million in Debt Relief for Servicemembers and Others Harmed by Lending Scheme

July 29, 2014, #14-15

Tennessee Attorney General Bob Cooper and acting director of the Division of Consumer Affairs Bill Giannini join the Consumer Financial Protection Bureau (CFPB) and 12 state attorneys general to announce a total of approximately $92 million in debt relief obtained for about 17,000 US soldiers and other consumers alleged to have been harmed by Colfax Capital Corporation and Culver Capital, LLC, also collectively known as "Rome Finance."

One hundred Tennessee soldiers once stationed at Ft. Campbell, KY, will receive the equivalent of $442,485 in debt forgiveness related to contracts Rome Finance offered to consumers purchasing computers, videogame consoles, televisions, or other products. These products were typically sold at mall kiosks near military bases with the promise of instant financing with no money down. In some cases, Rome Finance was the initial creditor, and in other cases, Rome Finance provided indirect financing by agreeing to buy the financing contracts from merchants who sold the goods.

Attorney General Cooper pointed out that recovery in this case was made possible because the soldiers complained to base officials who reported the problems to his office. "My office recently published a consumer manual for service members, and we work closely with Ft. Campbell consumer counselors," he said. "Soldiers shouldn't have to worry about being cheated when they buy a car, a computer or some other product or service."

In late 2008, General Cooper, acting on behalf of the Division of Consumer Affairs, won a $10.8 million judgment against Rome Finance, Inc., in the Montgomery County Circuit Court, with an $8.8 million award specially designated as soldier restitution. Rome then filed for bankruptcy reorganization in Oakland, CA, but a bankruptcy trustee was later appointed by the bankruptcy court to take over Rome, after the U.S. Trustee's office expressed concern over evidence that Rome was siphoning assets into new companies and maintained irregularities in its business operations. These new companies included Colfax Capital Corporation and Culver Capital, LLC. Attorney General Cooper eventually recovered approximately $2.2 million in restitution from Rome Finance and other defendants, which has already been distributed to affected soldiers.